by Jerry O’Driscoll
Yesterday was Cato’s annual monetary conference and Allan Meltzer gave the keynote address. Today at cato.org you can listen to a 7-minute Podcast of an interview with Meltzer summarizing his presentation. He has just completed the last 2 volumes of his history of the Fed.
Meltzer delivers a tough message: no nation that is spending as we are, running deficits as large as we are, along with a loose monetary policy, has escaped inflation. We must cut the deficits by cutting spending. He talks of a $500 billion spending cut. And he offers an innovative approach as to how, using applied Public Choice theory.
There are other tidbits. He advises the Chinese government and confirmed that they delivered harsh words on deficits to President Obama on his recent visit. And he completely undercuts the Fed’s specious arguments on indepedence. “The Fed is an agent of Congress.”
Throughout this recovery, I have found my posiition congruent with those of Meltzer, Anna Schwartz and John Taylor. I have argued from an Austrian position. I’m not sure what that observation suggests.